Skip to Content

Google hurts consumers by rigging prices

The EU has imposed a $2.7 billion fine on Google as a result of its anti-competitive behavior. A Silicon Valley antitrust lawyer Gary Reback explained how the search engine company hurts consumers.

Published: July 8, 2017, 9:40 am

    Reback explained in an opinion piece for the Washington Post, titled: You Should Be Outraged at Google’s Anti-Competitive Behavior that before 2007, products would appear in Google search results, ranked in the order of their quality to users.

    Following a seven-year long investigation by the EU of Google’s search engine practices, the European Commission has alleged Google denied “consumers a genuine choice” by unfairly promoting Google Shopping in internet searches to the detriment of its rivals. The fine is the highest ever imposed in Europe for anti-competitive behavior.

    Such “comparison shopping sites” were designed to identify the lowest prices. “The more accurate and comprehensive their results, the higher they were ranked and the more traffic they generated,” Reback noted.

    “But the more successful that comparison shopping sites became, the more they threatened Google’s business plan. Google makes money by selling ads placed next to its free search results, and merchants could not be expected to bid for ad placement if the listings in comparison shopping sites on the same search undercut their prices.”

    To address this, Google developed a devious plan, documented by the FTC, and published in the Wall Street Journal.

    “Quoting internal Google documents and emails, the report shows that the company created a list of rival comparison shopping sites that it would artificially lower in the general search results, even though tests showed that Google users ‘liked the quality of the [rival] sites’ and gave negative feedback on the proposed changes.

    “Google reworked its search algorithm at least four times, the documents show, and altered its established rating criteria before the proposed changes received ‘slightly positive’ user feedback. Internal Google documents predicted that the proposed changes would reduce rivals’ user traffic up to 20 percent and subsequently reported producing the desired results once the changes were implemented.”

    Google then bumped up results from its own comparison shopping service to the top of their search results. “After these changes, the only source of low-price information readily available on Google’s search platform came from Google’s own comparison shopping service,” Reback said.

    “Google’s conduct certainly hurt its rivals, particularly after a second round of search-listing demotions documented by the European Union. Many companies have been forced to lay off all of their employees and even shut down operations,” the lawyer concluded. Those rivals included US consumer review website Yelp, TripAdvisor, UK price comparison site Foundem, News Corp and lobbying group Fair Search.

    Google’s prices for everyday products are much higher than those on rival sites, sometimes more than 50 percent higher. A study by the Financial Times documented the higher prices, as Google eliminated services showing the lowest prices, free to merchants, and replaced them with high-priced ads.

    Other countries have also accused the Silicon Valley tech giant of abusing its market clout by imposing restrictions on Android device manufactures and mobile network operators.

    Keep ​your language polite​. Readers from many different countries visit and contribute to Free West Media and we must therefore obey the rules in​,​ for example​, ​Germany. Illegal content will be deleted.

    If you have been approved to post comments without preview from FWM, you are responsible for violation​s​ of​ any​ law. This means that FWM may be forced to cooperate with authorities in a possible crime investigation.

    If your comments are subject to preview ​by FWM, please be patient. We continually review comments but depending on the time of day it can take up to several hours before your comment is reviewed.

    We reserve the right to del​ete​ comments that are offensive, contain slander or foul language, or are irrelevant to the discussion.

    Americas

    Democratic Party in the US disintegrating

    Former Democratic National Committee (DNC) Chair Donna Brazile has charged the Clinton campaign of essentially rigging the 2016 primaries as well as being responsible for a staffer's murder before the election.

    Twitter’s suspension of Trump account raises serious questions

    President Donald Trump's personal Twitter account was shut down on Thursday after a disgruntled Twitter employee had deactivated the account the company said. But does Twitter's explanation make sense?

    US Air Force preparing to put nuclear-armed bombers on alert

    The US Air Force at Barksdale Air Fore Base, near Bossier City, Louisiana — is preparing to put nuclear-armed bombers back on 24-hour ready alert, a status not seen since the Cold War ended in 1991.

    Fake news beyond the headlines

    Mainstream media news content does no longer contain anything relevant beyond the screaming headlines designed to generate clicks.

    Culture wars: Hollywood mogul outed as serial sexual predator

    Hollywood's top globalist propagandist Harvey Weinstein, has been exposed not only as a serial sexual predator, but also as someone with a deceitful and duplicitous media in tow.

    Dawkins, other prominent leftists express contempt for Vegas victims

    The evolutionary biologist and atheist Richard Dawkins tweeted his contempt for white Americans and the Second Amendment of the US Constitution after learning about the mass shooting in Las Vegas.

    How stupid are American Democratic lawmakers?

    WashingtonThree Democrats from the House of Representatives have sent a letter to the US Federal Communications Commission (FCC) demanding an investigation into Sputnik Radio, "used as part of the Kremlin’s effort to influence the 2016 presidential election".

    Trump-DACA deal ‘biggest amnesty in American history’

    WashingtonFox News host Tucker Carlson warned on Thursday night that the Trump-DACA deal with Democrats will be the "biggest amnesty in American history". Worse still, president Trump will get nothing in return, Carlson said.

    California lawmakers introduce bill enabling the spread of HIV

    San Francisco Democratic Senator Scott Wiener is working full time to make infecting others with HIV, a minor transgression. Those who knowingly spread HIV may in future only face a misdemeanor charge.

    US Air Force sends out sprayer aircraft in wake of hurricane Harvey

    The Pentagon has dispatched C-130H Sprayers from the Air Force Reserve’s 910th Airlift Wing residing in Youngstown, Ohio to Texas in the wake of Hurricane Harvey.

    Go to archive